25th January 2024
Introducing our new series, 'Software in Focus: Why we partnered with...'. In this series we provide insights into our latest FPE portfolio companies highlighting what we believe makes them special. Find out more about our investment philosophy and the innovative companies we are proud to partner with.
FPE in Focus
As a private equity firm dedicated to the software sector, our focus lies in investing in two distinct types of businesses. We target companies that have either created their product, such as software or data and analytics solutions, or businesses that implement, support and manage a third-party software product. Our commitment is to support these companies, that have proven product-market fit and existing customer demand, an underlying market growth driven by first-time software adoption, or generational technology upgrade cycles, but are constrained in their growth potential due to limited access to capital and expertise. We refer to this transformative stage in their journey, where collaboration with a specialist investor becomes crucial, as the 'Second-Stage of Growth.'
Why the software sector?
Secular trends in adoption rates of enterprise software show great longevity, combined with robust cross-cyclicality through the SaaS/ recurring revenue model. The cross-vertical nature of SaaS also lends itself to inherent fund diversification for FPE and our investors, whilst offering geographical scalability. This adds stability to the portfolio and helps mitigate risk.
As a firm, we have focused heavily on building a team of specialist investors. We believe we have the largest team of specialists focusing on buyouts and significant primary capital investments in software companies in the UK (lower) mid-market. We actively support the UK technology ecosystem through our founder events, speaking engagements at industry events, and sponsorship of the fantastic Boardwave initiative.
FPE and 15gifts: A perfect match
15gifts is a leading provider of Customer Experience Management SaaS. 15gifts has grown rapidly in recent years and now serves almost 100% of UK telco mobile network operators as well as large mobile operators in the US and Europe. Its software combines consumer behavioural psychology with machine learning to humanise online sales journeys and model real-time, data-rich customer profiles.
When we first met Tom Cox, founder of 15gifts, in early 2022, we were immediately drawn to the clarity of his product vision, the strength of team culture, and the quality of customer logos the business had attracted in recent years. Importantly, from an investment perspective, 15gifts exhibited several key traits common across FPE’s portfolio:
- Product quality: We were impressed with the quality of 15Gifts' product. Their customers recognise its importance; the AI/ML technology behind their Guided Selling engine is truly innovative and sets them apart from competitors. Additionally, their team of data scientists are skilled in explaining the value of the product to customers.
- Defensibility: 15gifts has achieved significant traction in the Telco market with limited go-to-market capability. This has been driven by the impressive ROI delivered to its global customer base, with best-in-class retention and upsell rates providing a robust basis upon which to layer accelerated growth initiatives.
- Market convergence: There are strong connections between the Customer Experience Management SaaS market, which we have been involved in through FPE portfolio company MaxContact, and the Guided Selling sector where 15Gifts operates. 15gifts' technology is now being used in webchat and chatbot solutions, which are being used for more than just support - they're now being used for sales and conversion purposes too.
- Scalability: 15gifts has scaled impressively into Europe and the US, providing the business with reference ability and local market expertise, which will serve it well as our funding round accelerates its go-to-market capability.
- Significant market adjacencies: The business has, and continues to, invest heavily in adjacent product capability such as its forthcoming Profiles product, leveraging Zero Party Data and machine learning to drive optimised personalisation and conversion journeys.
15gifts is rapidly accelerating its investment into technical and go-to-market resources, to further advance its leading product whilst productising its go-to-market strategy. FPE is supporting with a number of associated value creation initiatives, as it supports the business moving through its 'second stage of growth'.
What's next for 15gifts?
15gifts is rapidly accelerating its investment into technical and go-to-market resources, to further advance its leading product whilst productising its go-to-market strategy. FPE is supporting with a number of associated value creation initiatives, as it supports the business moving through its 'second stage of growth'.
The team at 15gifts is leveraging our wider network and collaborating with FPE's portfolio companies to exchange valuable insights on important organisational, technical, and growth initiatives with other founders in the FPE family including Global App Testing, MaxContact, and Kallik. One of the first initiatives as part of our investment was to help 15gifts recruit a Chair and CFO from our network to support Tom and the team further as the company continues its growth journey.
To discover more about 15gifts, visit their website at https://www.15gifts.com, or feel free to contact Llewellyn John or Chris Kay at FPE for additional information.